In March 2021, Twitter co-founder Jack Dorsey auctioned off his first tweet as a non-fungible token (NFT) for $2.9 million. The NFT, technically a digital certificate of ownership, was purchased by Sina Estavi, the CEO of Malaysia-based cryptocurrency company Bridge Oracle. Estavi had plans to sell the NFT for $48 million and donate half of the proceeds to charity.
However, the NFT has since lost almost all of its value. As of July 20, the highest bid for the NFT is just $3.82, according to data from OpenSea, one of the world’s largest NFT marketplaces. Further details reveal that the highest bid received recently was $47.78.
Jack Dorsey’s Tweet-Turned-NFT Plunges By 99%
As the bids trend show, most traders or collectors think the NFT is worth far less than its original purchase price going by the value of submitted bids. For instance, in May, the highest bid was $13.19. The latest submission on July 19 at $3.82 reveals how the general NFT trading and collector community perceives the value of what was supposed to be a multi-million NFT.
Beyond trader sentiment, the dramatic drop in value is a sign of the volatility of the NFT market. Like cryptocurrencies, NFTs are a relatively new asset class, and their value is often based on speculation. As a result, NFT prices can fluctuate, with some known to explode to millions in short periods.
For example, in the last bull cycle from early 2020 to late 2021, popular NFTs like BAYC and CryptoPunks were sold for millions of dollars on platforms like OpenSea.
Blame The Winter And Traders’ Perception?
Some commentators on Twitter think the sharp drop in Dorsey’s first tweet as an NFT is primarily because the asset on Ethereum is a simple screenshot of his first tweet, which read, “just setting up my twttr.” The tweet, converted to an NFT, was minted on the Valuable platform, a social media platform leveraging the blockchain, before being sold and transferred to OpenSea.
The above, coupled with the realization that the tweet remains under Dorsey, means the holder of the NFT technically doesn’t own the actual tweet. Because it is minted on Ethereum, Estavi only owns the digital certificate of ownership. If Estavi decides to accept the bid, it means the charity organization, GiveDirectly, will receive cents.
The drastic drop in bids reflects the general state of the NFT market. Following sharp declines in crypto prices in 2022, NFT trading activity rapidly shrunk, with top collections like CryptoPunks and Bored Ape Yacht Club (BAYC) registering sharp drops in floor prices.
The floor price of an NFT collection is the lowest price an item can be sold for in the listed marketplace. As of mid-July 2023, the BAYC floor price, for instance, had crashed by over 90% from $600,000 recorded at the heights of the 2021 Bull Run.
Feature image from Canva, chart from TradingView